If you want my money, make me jealous.
Partner Ben Lerer shares one of his key investment strategies.
“What makes you pull the trigger on a deal? What do you look for?”
There are numerous factors that might make an investment interesting, but there’s one that often pushes me over the edge and makes me commit to funding: jealousy.
Like I’ve said before, I don’t have a finance background; I learned venture capital on the job, which makes me an operator first and an investor second. Because of that, while I appreciate spreadsheets, when it comes to assessing the viability of early-stage investments , I tend to listen to my gut and my experience as a business owner. From a practical standpoint, that means getting to know a founder’s personality, their background, and their values. If all of those things resonate with me, the deal is probably on its way, but it’s not a lock by any stretch.
Before I invest, I need to see a concept, an approach, or a strategy that makes me say, “Dammit. I wish I were doing that.”
Case in point: About three years ago, I went mattress shopping through traditional channels and it was a horrible experience. Honestly, I was frustrated enough that if JackThreads and Thrillist and Lerer Hippeau hadn’t been huge parts of my life, I would have strongly considered starting a mattress company of my own. Actually. Right around that time, Philip Krim and the Casper co-founders came in and pitched, and I realized they were building exactly what I wanted to create (only better, if I’m being honest with myself). I had an immediate sense of “I wish I were doing that,” and that feeling turned into us leading their seed round.
The thing that was so magnetic about them [Casper] was how much fun it looked like they were having. How passionate and excited they were. How knowledgeable and fearless.
Let me be clear — the reason I was jealous of Casper wasn’t just my personal interest in the business category they were tackling. I’m not asking founders to track my shopping habits or my likes and dislikes before they pitch me. The thing that was so magnetic about them was how much fun it looked like they were having. How passionate and excited they were. How knowledgeable and fearless. How clear their vision was and how they had a true sense of what they wanted to create. They only had opportunity ahead of them. Who wouldn’t be jealous of that?
Real confidence comes from people who have a belief and a mission and a path to get there.
Confidence is also a huge factor in this. You can smell it on someone, and it’s impossible to fake by the light of day. Look at Donald Trump, who’s all bluster and narcissism without a plan; he’s a fake with big ideas but no handle on them. Real confidence comes from people who have a belief and a mission and a path to get there — a big, bold concept combined with a solid approach. I’m most envious of that balance of art and science, flash and practicality. Fiery ideas aren’t exciting to me unless they feel like a controlled flame, and pragmatic ideas aren’t interesting unless they’ve got some spark. I want that pang of jealousy that says something great is about to happen while also feeling like their plans are actionable, defensible, and scalable. That’s when I think, “This person is going to have their cake and eat it, too, and I want in.”
Read more about Ben Lerer and the rest of the LHV team, and check out other Lerer Hippeau investments.